About the author

Mark J. Perry is concurrently a scholar at AEI and a professor of economics and finance at the University of Michigan's Flint campus. He is best known as the creator and editor of the popular economics blog Carpe Diem. At AEI, Perry writes about economic and financial issues for American.com and the AEIdeas blog.

Some clear thinking on the national debt and the real fiscal problem: Government’s spending on entitlement programs

Scott Grannis provides some refreshingly clear and cogent thinking about why it’s not repaying the swelling national debt that necessarily by itself creates a problem for the U.S. economy; rather it’s the government’s increasing spending on unproductive programs in the first place, financed with increasing levels of national debt, that creates the real problem for the economy. Here’s a slice:

“Debt becomes problematic when the money borrowed is put to unproductive use, because that leaves the borrower without the resources to repay the loan, and that will eventually disappoint the lender. Most of the money that Uncle Sam has borrowed in recent years has not been put to productive use, and that is a big problem, because the economy has not grown sufficiently to pay back the debt. The federal government has borrowed trillions of dollars in order to 1) send out checks to individuals who are retired, unemployed, disabled, and/or earning less than some arbitrary amount; 2) pay salaries to millions of bureaucrats, 3) subsidize bloated state and local governments, and 4) subsidize corporations engaged in activities (e.g., wind farms, ethanol production) that would otherwise be unprofitable. The money was essentially wasted, since it wasn’t used to create new sources of revenues with which to service the debt in the future.

“The burden of our debt binge is already upon us because we have borrowed trillions of dollars to support consumption, rather than new investment. What matters in the future is how productively we spend the proceeds of future bond sales, not how we pay off the bonds we’ve already sold. We can make progress on the margin if we can reduce federal spending relative to the size of the economy, since that in turn will reduce the amount of the economy’s resources we waste. Allowing the private sector to increasingly decide how to spend the fruits of its labors will likely improve the overall productivity and strength of the economy, because the private sector is most likely smarter about how it spends its own money. We’ve got to get the government out of the way if we are to move forward.”

“Let’s start with the problem: the budget deficit. Under current policy, the federal government is spending vastly more than it is collecting in tax revenue. And that will be true for the next several decades, thanks largely to the growth in entitlement spending that will occur automatically as the population ages and health care costs increase. As a result, the ratio of government debt to the nation’s gross domestic product is projected to rise, substantially and without an end in sight.

That can happen for a while, or even a long while, but not forever. At some point, investors at home and abroad will start questioning our ability to service our debts without creating steep inflation. It’s hard to say precisely when this shift in investor sentiment will occur, and even whether it will strike in this president’s term or the next, but when it does, it won’t be pretty. The United States will find itself at the brink of an unprecedented financial crisis.

Ultimately, unless we scale back entitlement programs far more than anyone in Washington is now seriously considering, we will have no choice but to increase taxes on a vast majority of Americans. This could involve higher tax rates or an elimination of popular deductions. Or it could mean an entirely new tax, such as a value-added tax or a carbon tax.”

Discussion: (281 comments)

in order to make a cogent argument, you’d need to list out each program that is considered not affordable and it’s cost rather than just using the generic term “entitlement” which basically comes across as a generic, and non-specific attack against nothing in particular.

let’s get to the specific programs an their costs at least as a first cut towards cutting the most egregious.

wiki: An entitlement is a guarantee of access to benefits based on established rights or by legislation. A “right” is itself an entitlement associated with a moral or social principle, such that an “entitlement” is a provision made in accordance with legal framework of a society. Typically, entitlements are laws based on concepts of principle (“rights”) which are themselves based in concepts of social equality or enfranchisement.

more: The kind of government program that provides individuals with personal financial benefits (or sometimes special government-provided goods or services) to which an indefinite (but usually rather large) number of potential beneficiaries have a legal right (enforceable in court, if necessary) whenever they meet eligibility conditions that are specified by the standing law that authorizes the program. The beneficiaries of entitlement programs are normally individual citizens or residents, but sometimes organizations such as business corporations, local governments, or even political parties may have similar special “entitlements” under certain programs. The most important examples of entitlement programs at the federal level in the United States would include Social Security, Medicare, and Medicaid, most Veterans’ Administration programs, federal employee and military retirement plans, unemployment compensation, food stamps, and agricultural price support programs.

The point being made is that we can’t spending at the current rate. The choices of cuts would have to be made in the legislature, but the first step is accepting that we have a spending problem. Much like addiction – first the denial has to stop.

Is it “we” for things you approve of and “they” for things you wish to disparage?”

Nope, not for me but it is the problem as some folks want all cuts made only to entitlements while others want DOD/National Defense …

the problem is that we do not vote out people who say we have a spending problem but then turn around and vote in favor of CRs.

I mean the whole thing is totally bizarre. The very same folks who blew up the budget under Bush, just spent the last 4 years saying we have a spending problem but instead of those same people admitting that they blew up the budget and agreeing to cut the things they increased spending on – to roll it back – they say it’s up to Obama to make the cuts and those cuts can’t be DOD.

so what are you going to do when the GOP is so totally dysfunctional?

I’m blaming the Dems also but the Dems have never promised to be fiscal conservatives in the first place. They are and have been tax & spenders. But the GOP – now the GOP claims to be fiscal conservatives but their actions are the opposite. They spent like drunken sailors and now claim that Obama is responsible for the spending – that they themselves voted in favor of prior to Obama taking office.

““Nope, not for me but it is the problem as some folks want all cuts made only to entitlements while others want DOD/National Defense …”

Zing!!…

ron h regarding ‘Zing!‘ I get the following when I click on that link:

Forbidden

You don’t have permission to access /2012/12/some-clear-thinking-on-the-national-debt-and-the-real-fiscal-problem-governments-spending-on-entitlement-programs/image/jpeg;base64,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 on this server.

“I’m blaming the Dems also but the Dems have never promised to be fiscal conservatives in the first place.”

What a crock of the usual lies coming from Larry G searching for a way to defend the hand that feeds him. Obama promised multiple times to cut the deficit in half by 2012. On Sunday, Obama told David Gregory that he “cut spending by a trillion dollars” in 2011. In 2006, he called Bush “unpatriotic” for running up less than half the debt in 8 yrs what Obama has run up in 4. I could give countless examples of Democrats like Nancy Pelosi claiming to have been fiscally responsible.

Larry is either a liar or, like typical Obama voters, maybe just too stupid to know any better.

I do not recall Congress delivering cuts in spending to Obama to have him veto it.

In fact, Republicans have consistently voted in favor of the CRs to continue spending at the levels established by the Congress under Bush.

You’d think if the GOP was truly serious about cutting spending – they’d stuff the CRs and at the least force Obama to veto the cuts.. but nope.. the GOP votes overwhelmingly in favor of spending at the previous levels via the CRs.

“I do not recall Congress delivering cuts in spending to Obama to have him veto it.”

Funny how that works when Democrats don’t deliver a budget for 3 yrs in a row. The GOP sent budgets that did cut spending to Harry Reid’s Senate where they were ignored. Obama regularly promised to veto them if they did somehow manage to pass the Senate. Still, you put the onus on the GOP because you’re a dishonest parasite.

“You’d think if the GOP was truly serious about cutting spending – they’d stuff the CRs and at the least force Obama to veto the cuts.. but nope.. the GOP votes overwhelmingly in favor of spending at the previous levels via the CRs.”

So because the GOP hasn’t forced yet another crisis, you support the crew that stymies the cuts the GOP would like to make but maybe doesn’t have the stomach to force another showdown with your hero.

“I’m blaming the Dems also but the Dems have never promised to be fiscal conservatives in the first place.”

“you can dialog politely and I will return the favor but if you want to play like a 6-yr old, then have at it but by yourself.”

Ok, so you don’t want to tell us whether you’re ignorant or a liar. I’m going to go with liar since I believe I previously called you out on this same b.s “Democrats never claimed to be responsible” idiot argument .

Juandos, I am not sure this is quite on point. But regardless of the fed-buying or bond selling, it is tranferring rights to consume or invest away from individuals that expect a full return on capital.

While I agree that how we pay it back is far less significant than how it has been spent. Spending so that it is not reasonable to believe that the bonds could be paided back would be a substantial impact to our economy.

“Ultimately, unless we scale back entitlement programs far more than anyone in Washington is now seriously considering, we will have no choice but to increase taxes on a vast majority of Americans. This could involve higher tax rates or an elimination of popular deductions. Or it could mean an entirely new tax, such as a value-added tax or a carbon tax.”

You may consider this clear thinking on the problem, but where is the clear thinking on the solutions? There does not seem to be clear thinking anywhere these days – especially when related to congress, conservatism or progressives. All seem to have there own idealisms and to hell with everyone else’s ideas. It’s doubtful any ideal can ever be realized when it comes to humans – mainly because we have to take humans as they are. Most idealists don’t know the meaning of the word. Communist failures have certainly indicated that.

Why not deal with some precise solutions that can work, where everyone participates in resolving the national debt and the fiscal problem? In other words come up with solutions that everyone despises, but no one is badly damaged by the solutions?

Examples:

* Raise the full retirement age (gradually) to as high as 70.

* Raise the number of years used in computing social security benefits from 35 years to – whatever.

* Apply social security tax (and medicare tax) to cover all earned income and unearned income above specified income level. Why should unearned income be almost totally exempt?

* Increase social security/medicare tax rates somewhat. Why not? Reducing payments for entitlement programs is basically an increase in taxes on those bearing the brunt of the reductions. Not a tax increase? Put that question to the people.

* Lower taxes where appropriate (corporate taxes, perhaps, to equalize competition with foreign corporations). Raise taxes on those who can easily absorb increases.

* Stop acting like we’re the good guys and everyone else are the bad ones. In other words, put an end to all of the American wars, that, in reality, have accomplished very little. Such games can really be expensive. Eventually, someone is going to knock us of the king of the hill anyway. Violence does beget violence – right down to the common person.

The list could go on and on and on. There are so many little adjustments that could be made, with little bloodshed for anyone in particular. But everyone should at least feel a pin-prick. Oh, but I forgot. Congress would be needed to think outside the box.

That’s a nice fantasy, dear. The people who I suspect you think can absorb the these taxes are not sufficiently large in number to make any difference at all. Also, raising taxes on them kills their incentive to produce taxable income, but increases the incentive to seek rents. So, yeah, you’ll get them to pay more taxes, but only after they receive a subsidy from government that is much larger than the amount they pay in additional taxes. You would not BELIEVE how cheaply politicians are purchased.

The unavoidable truth is that the best way to raise revenue is to tax the middle class because you can suck it directly out of their paychecks before they even know what happened to them. They have less flexibility to arrange their affairs to avoid taxes and they aren’t politically connected.

Of course, the VERY best way to raise revenue is to forget about swiping a higher percentage from the productive and incentivizing them to produce less. The best way is to lower marginal tax rates to encourage them to produce more. Take the deductions and loopholes and all the crap that is there to ease the pain of a high tax rate and reduce the rate outright, thereby increasing incentive to work without necessarily reducing the tax rate for the same level of income. And do it for everyone.

And most of all, reform the tax structure so that there isn’t this constant uncertainty. So that investments planning ca be free of surprise attacks and business is freed from its paralysis. As John Cochrane points out, if an entrepreneur knows for sure that he’ll get to keep 50% of everything he makes, he can make investment decisions and he will. If he is under constant threat from the Potomac Swamp and the alphabet soup of regulatory agencies, he can’t.

Your SS fix just kicks the can down the road or reduces the already paltry “benefit” to nothing. Might as well get rid of it altogether. Ponzi schemes are hard to fix as they are…well….fraudulent schemes with unstable cash flows.

I like the idea of chopping down the military and getting the hell out of our idiotic entanglements around the world. We spend a lot on them. There is zero evidence that they do any good and lots of evidence that they do harm. And let’s stop subsidizing Europe’s collapsing socialism by pulling out of NATO completely.

Any CFO will tell you that you can borrow to your heart’s content (and your enterprise value will increase) as long as the ROI from the projects on which you spend the money exceeds your borrowing cost. When it doesn’t, you become toast. Even at a zero cost of capital, our Federal government fails to meet that test.

we decide as a nation what we want to spend money on. Some people are OK with spending huge sums on defense but not entitlements. Others think some entitlements are just as legitimate as spending on defense.

When we give tax breaks for mortgages or charitable deductions – those are essentially entitlements also.

That’s no different than any enterprise. Management and Boards decide on behalf of their shareholders how to spend money. But if they keep deciding to spend on things with low economic returns they won’t be able to attract growth capital and they die. Nations that continue to make poor choices face similar endgames of slow growth and rising borrowing costs. It’s not a question of whether entitlements or defense spending are “legitimate” choices; it’s whether those choices produce enough economic return to justify the borrowing cost. Taking $1 from one set of people in order to give 80 cents to another and burn 20 in compliance costs doesn’t sound like a positive return to me.

have it your way in terms of what I might or might not know – but I do know this – in ANY governance that explicitly provides for voting – what is in ANY Constitution of more than 200 countries – WILL CHANGE AND EVOLVE over time to what people who vote want or do not want.

1. amendments are VERY difficult and made so deliberately. you need a 2/3 majority in both houses and then 3/4 of state legislatures. that is NOT democracy in a “majority rule” sense. it requires an extreme supermajority.

this has been increasingly flouted by the federal government. eg. prohibition was enacted by an amendment to the constitution and repealed later by one. the federal government realized (and honored the fact) that it did not possess authority to ban alcohol under the constitution and therefore had to do so by amendment. but drugs like pot or cocaine were banned by simple legislation. why is that now constitutional? the difference in how the 2 forms of prohibition were enacted is stark and, under any sane and textual reading of the constitution, the whole wars on drugs is illegal. our founding fathers would have thought so. so would the leaders 130 years later. it’s just the recent guys that have no respect for the 10th amendment.

2. the fact that the constitution includes text to the effect that rights are endowed by person-hood, not granted by the state bolsters this and would make the repeal of rights counter to it’s spirit.

3. those rights still stand. laws cannot legal be made to violate them unless they are repealed. if that were to happen, we would no longer have a gold standard constitution.

4. gold standard is not the same as perfect. at the time, the US constitution was the best available. since then, some others have added clauses that make them better. off the top of my head, i know that both germany and norway have specific language in their constitutions that explicitly prevents the repeal of individual rights and/or law contrary to the spirit of the constitution. the inclusion of such text in our own constitution would improve it as a protector of liberty.

so long as you keep confusing “is” with “perfect” you are never going to be able to get out of the circular logic trap of endless appeals to practice that you are in.

“have it your way in terms of what I might or might not know – but I do know this – in ANY governance that explicitly provides for voting – what is in ANY Constitution of more than 200 countries – WILL CHANGE AND EVOLVE over time to what people who vote want or do not want.

you have to live with this reality, guy.”

and any government that effects such change in such a way that it abridges the natural rights of individuals becomes increasingly tyrannical by doing so.

THAT is reality and somehting you need to wake up to.

you truly have the mentality of a would be tyrant. it will wind up making you a serf if you get your way.

“2., 3. – re: “rights” – not enumerated are “rights” interpreted and defined by others and the will of the people.”

um, no. not even close. read the 10th amendment.

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

the federal government can make absolutely no such claims. the exact opposite was precisely what was intended and codified.

“I keep asking.. name a country or countries that don’t have the majority-rule problem..”

and i keep telling you that that is an appeal to practice logical fallacy. is that going to sink in at some point? you could have made the same argument 1000 years ago about kings or 300 years ago about women’s suffrage. would that have demonstrated that you were right and kings and a lack of female voting were good things?

you keep mistaking “is” for “good”.

you have absolutely no idea what libertarianism is. most people DO agree with it.

they want rights and they want them protected.

the problem is that many also get hypocritical about it and seek to use democracy to take from others and preference themselves.

it’s funny how strongly you oppose the will of the people when it supported jim crow laws against black people but how firmly you support it when such preferences are used against, say, rich people.

your position is both hypocritical and internally inconsistent.

the libertarian belief set is VERY straightforward.

humans have natural rights. it is the role of government to protect these rights and provide liberty thereby gaining legitimacy from the consent of the governed.

government exist to protect rights and enforce contracts.

virtually everyone agrees with these functions. i suspect even you do.

it’s when you start going for more that your views veer into indefensible hypocrisy. you claim to support rights to free association and to property, but then vote for things like affirmative action and progressive taxes for the purpose of wealth redistribution that violate those rights.

then you use the logical fallacy of appeal to majority (and very selectively at that) to try and defend your hypocrisy and bad logic.

your political views seem to be based entirely upon bad logic and hypocritical paternalism.

trying to call that “reality” is just a weak dodge to try and get out of being unable to defend your beleifs in a consistent fashion.

“f a majority or super-majority of people are in favor of doing such “tyrannical” things.. what does that mean?”

it means that they are tyrants that have taken liberty from individuals.

stop and apply your own logic larry.

the majority supported slavery at one point, jim crow at another.

did that make those practices good and right?

are you ever going to stop making this same bad claim? you do this over and over. it’s an endless nested set of appeal to practice fallacies.

i am not sure i have ever met anyone as impervious to logic as you are.

so seriously, answer the question:

a supermajority supported slavery.

hell, article 5 of the US constitution explicitly prohibited any amendments that would limit or tax the salve trade until 1808.

did that make it right?

by your logic it did.

if you say no, then you must admit that majority (or even supermajority) support is not a demonstration that something is right and therefore (please) drop this absurd line of argument once and for all.

so there it is, yes or no? did supermajority support of slavery and explicit constitutional restrictions on stopping it make slaver good and right?

it means that they are tyrants that have taken liberty from individuals.”

a “majority” support tyranny?

“stop and apply your own logic larry.

the majority supported slavery at one point, jim crow at another.”

yes.

“did that make those practices good and right?”

governance is not about “good and right” unless a majority see it that way and not all do in every situation.

“are you ever going to stop making this same bad claim? you do this over and over. it’s an endless nested set of appeal to practice fallacies.”

I’m not making a “bad claim”. l’m pointing out to you the simple reality… it’s right in front of you but you disagree with it apparently.

“i am not sure i have ever met anyone as impervious to logic as you are.”

there is no logic is accepting reality. It means you accept it even if you don’t like it. you cannot make it something else because you disagree with it.

“so seriously, answer the question:

a supermajority supported slavery.

hell, article 5 of the US constitution explicitly prohibited any amendments that would limit or tax the salve trade until 1808.

did that make it right?

by your logic it did.”

nope. “right” and what the majority want are not the same thing.

“if you say no, then you must admit that majority (or even supermajority) support is not a demonstration that something is right and therefore (please) drop this absurd line of argument once and for all.

so there it is, yes or no? did supermajority support of slavery and explicit constitutional restrictions on stopping it make slaver good and right?”

do you not understand what is meant by “governance”.

it does not mean all things good.

it never did.

people have values and not all of those values are good but if a majority support those values in a governance model that allows them to decide then that’s what you got.

calling a tyranny like slavery, which you admit was not in any way validated as a practice by supermajority support, “governance” is meaningless.

pharonic egypt had governance too. at the time it was considered quite the model to emulate. peeple were very impressed with the pyramids.

so what?

trying to use governance and tyranny of the majority as a REASON to do something is completely invalid.

you seem unable to distinguish between “is” and “should”.

there is no question that a majority can support an enact bad and tyrannical laws. on this, we agree. but where you really miss the boat is on what do do about it.

your logic is that of a tyrant (albeit a majority tyrant). tyranny of the majority is no less a tyranny for having public support.

your logic is fully circular and baseless. it is also self contradictory.

you use majority support to argue for the practices of “governance” but then also admit that majority support does not make somehting good, right, or any less a tyranny. (slavery example) these views, when combined, are utterly useless in determine what one should want to do.

if majorities can commit evils, then using majority as a justification for a practice is meaningless.

our founders knew this. that is WHY they elevated the rights of the individual above the powers of the government (particularly the federal government) in our constitution.

it was explicitly to thwart the tyranny of the majority that you keep trying to use as a basis for policy.

left out of this is the glaring fact that the tool you keep trying to use is one you have admitted is not useful for determining what is good or right, merely popular.

thus, you seem to have no basis at all for applying any sort of consistent value judgment to any existing or proposed policy.

you are literally pointing to a law’s existence as justification for it’s existence because the majority voted for it while also admitting that majority support does not prove that is is good, right, ethical, or compatible with basic notions of liberty.

this is why you are just endlessly chasing your tail.

imagine if our founding fathers had though like you.

well, we’ve all got kings, and they do some bad things and some good things, but you know, that’s what we’ve got. better live with it…

they sought something better. somehting more just, more fair, and that afforded more protections and liberty to the individual.

imagine their shame at watching you try to put the brakes on that because “tyranny of the majority is what we’ve got”.

saying that’s what we’ve got is a tautology. that says nothing about if it is good bad or indifferent or if it is heading in a good direction.

you have yet to make a single valid statement outlining anyhting that could be used to make an actual decision.

it’s also odd how you seem to like the will of the majority here, yet when talking about consumption, fear that people will choose things that are not good. you do not trust them to make good choices about what they themselves should want, yet you seek to empower them to make choices about what we shall all be required to be legally beholden to. how can you even hold these thoughts in your head simultaneously? i cannot choose for myself whether to buy porn, but i can make laws about what porn you can see? how is it i suddenly get competent to rule you when you do not feel i could even rule myself?

i doubt we will ever plumb all the depths of the wild inconsistencies in your thoughts larry.

as ever, thanks for the tour of the illogic museum. i’m heading out and will leave you to it.

calling a tyranny like slavery, which you admit was not in any way validated as a practice by supermajority support, “governance” is meaningless.

pharonic egypt had governance too. at the time it was considered quite the model to emulate. peeple were very impressed with the pyramids.

so what?

trying to use governance and tyranny of the majority as a REASON to do something is completely invalid.

you seem unable to distinguish between “is” and “should”.”

nope. I distinguish between what is real and reality and what is not.

“there is no question that a majority can support an enact bad and tyrannical laws. on this, we agree. but where you really miss the boat is on what do do about it.”

well, no… I don’t think you can do anything about it if there is representative governance that essentially defaults to what a majority (or supermajority) want.

I do not see any other existing (and real) governance models that worth in the ways you say they should.

“your logic is that of a tyrant (albeit a majority tyrant). tyranny of the majority is no less a tyranny for having public support.

your logic is fully circular and baseless. it is also self contradictory.”

there is little logic to simply recognizing the realities of the current governance models on the planet right now.

“you use majority support to argue for the practices of “governance” but then also admit that majority support does not make somehting good, right, or any less a tyranny. (slavery example) these views, when combined, are utterly useless in determine what one should want to do.”

no I don’t. I say that’s the way it is… when you have a majority vote system. I do not say it is “right”.

“if majorities can commit evils, then using majority as a justification for a practice is meaningless.”

“our founders knew this. that is WHY they elevated the rights of the individual above the powers of the government (particularly the federal government) in our constitution.”

I would say they did not if in the same document they enshrined de facto majority rule.

“it was explicitly to thwart the tyranny of the majority that you keep trying to use as a basis for policy.”

but the majority vote right won out over individual rights, no?

“left out of this is the glaring fact that the tool you keep trying to use is one you have admitted is not useful for determining what is good or right, merely popular.”

I do not say that majority rule is 100% right 100% of the time. In fact, I say majority rule is not about what is right or wrong in an organic sense.

“thus, you seem to have no basis at all for applying any sort of consistent value judgment to any existing or proposed policy.”

looking at the reality is “no basis”?

“you are literally pointing to a law’s existence as justification for it’s existence because the majority voted for it while also admitting that majority support does not prove that is is good, right, ethical, or compatible with basic notions of liberty.”

Nope. I’m pointing to the Constitution which enshrined majority-rule decision-making.

“this is why you are just endlessly chasing your tail.”

LORD Morg!

“imagine if our founding fathers had though like you. …… blather deleted

“you have yet to make a single valid statement outlining anyhting that could be used to make an actual decision.:

except that the founding fathers did believe in majority rule… not only for elections but for Congressional laws and SCOTUS decisions.

“it’s also odd how you seem to like the will of the majority here, ”

it’s a simple recognition of the practical meaning of the Constitution.

i doubt we will ever plumb all the depths of the wild inconsistencies in your thoughts larry.

as ever, thanks for the tour of the illogic museum. i’m heading out and will leave you to it.

Morg – there is no real logic in looking at the realities – and admitting they are true.

I do not justify any of it as right or wrong – but, instead, the practical meaning of what majority rule is.

the “logic” is simple. Our Constitution enshrines a majority-rule governance – in elections, in creating laws and in SCOTUS decisions.

the Libertarian “logic” seems to be that this is not right.

that’s it’s unfair and ignores the rights of the minority.

that’s probably true but it does not change the reality.

this is not about “logic”. It’s about the simple task of recognizing and accepting the reality of what kind of governance we have – and in fact, most countries that have elected representation.

I did ask – if Libertarianism (or, for that matter, any type of economy that advocates for the individual, really incompatible with governance systems based on voting and majority wins.

the only alternative I can see is either:

1. – governance by non-representative leaders (or leader)

or –

2. – no government at all

but this is where folks like Ron, and Morg and others with similar attitudes about government via elected representation and majority-vote law creation… go off the trolley.

they’re simply unalterably opposed to it – and I can respect their convictions even if I do not agree with them but they can’t accept the realities apparently so those who suggest to them that we do have a majority-rule system are said to be “illogical” which is downright comical… but I play along… in part because I’m truly trying to understand where they are really coming from.

But they always circle back around to the “govt is bad” theme … and anyone who dare challenge that idea is “illogical”, moronic, etc, etc.. they essentially revert to personal attacks… and name calling… real grown-up stuff.

So lets posit an economic question, since at least a part of the 9 year extension of life expectancy since 1958 is due to medicare, the question what are 4or 5 more good years of life worth? (To society as a whole). In general this is the question to be asked as medicine gets more expensive in general, how much are good additional years worth? So what is the ROI of the additional years of life to society?

Why do you say it’s due to medicare? Medicare is pretty nasty and it crowded out private providers that might have provided much better service. How do you know that Medicare didn’t, in fact, COST lives?

I’ll answer how much 5 more years of your life is worth to me: zero. No offense to you at all. You’re a stranger and I’m not willing to sacrifice my own consumption or that of my loved ones to buy some some stranger more time. And that’s the problem with socialism. You are not contributing to “society” in any meaningful way as an old person who is not statistically long for this world anyway. That’s why people over 65 years old can’t get dialysis through the NHS. They’re past their prime. If you and your family very much value your life, then you and your family should make the trade-offs necessary to keep you alive. Or you should appeal to charity. People are very willing to help each other out because we feel a moral imperative to help out those in need. But, when the money is collected via taxation so that it can be mostly wasted on government bureaucracy and fraud, it becomes something to avoid.

I don’t know about Medicare, but it’s pretty clear that Medicaid is a killer – literally:

“… a University of Virginia study, published in Annals of Surgery, finding that surgical patients on Medicaid endured a 97 percent higher likelihood of in-hospital death than patients with private insurance, and a 13 percent greater chance of death than those with no insurance at all … the UVA study, has reviewed millions of individual patient records to learn what happened to specific patients with specific forms of health insurance.” — National Review

It’s interesting that so many people, like “kleht”, believe that programs like SS and Medicare would be “sustainable” if only we would all agree to increased taxes and reduced benefits. I doubt very much that they would show the same level of understanding had the investment arm of some private entity offered a comparable solution after having squandered their life’s savings.

Even if you were to die 5 years early it’s uncertain that taxpayers would realize any real cost benefit since Medicare continues to pay for your medical care even after you’re dead:

“Between 2004 and 2008, CMS paid for 142,000 procedures at 2,119 hospitals or clinics on nearly 5,000 dead patients, at a cost of roughly $33 million, according to an analysis by PearlDiver, a medical database management company. In 2008, the Senate Permanent Subcommittee on Investigations found that Medicare had paid tens of millions of dollars to suppliers who were using the identification numbers of dead doctors when filing claims. The total amount paid for these claims is estimated to be between $60 million and $92 million, according to the subcommittee report.” — Smart Money

Of course, most of these dead people are probably still voting, so why deny them Medicare benefits?

“1. – that when someone else pays, like the govt, then people will demand and get unlimited “goodies”.”

2. – then when the govt makes the same decisions that you as an individual would make – to decide when the costs exceed the benefits – we say the govt is a “death panel”.

Those are not opposites. The first is simply a recognition of economic reality based on human nature that a person will spend their own money more carefully than they will spend someone else’s.

The second shows an appalling lack of cognizance on your part that any decision around life saving or extending care is and should be made by the patient and their loved ones, not by a government death panel, as all value is subjective.

You have highlighted the two reasons that third party payment for medical care is a failure.

An excerpt: “We can either do it on the basis of first come, first served, or we do it by turning down the person least likely to benefit from the treatment.

“If you have a patient in their 70s with a lot of problems, who is unlikely to survive anyway, and a patient in their 20s or 30s with just kidney failure, then you have to make a decision to turn down the elderly patient and treat the younger one.

“But we are having to say no to more and more people.”

No surprise – socialized medicine causes shortages. So much for the promise of free care when you need it.

Anytime you have a 3rd party payer for health care – be it private or public – there are presumptions based upon the taxes or premiums as to how much care, in this case, dialysis, will be needed and if the actual number ends up higher then some kind of triage WILL take place.

We make decisions like this – all the time – whether it be newborns with terrible health problems or elderly in the last stages of their life – and again, it happens for 3rd party payers – and, in reality, if you were paying, it would happen to you – where you’d be looking at your assets available vs the costs and how much more time it would buy you (or not).

We keep saying two opposite things:

1. – that when someone else pays, like the govt, then people will demand and get unlimited “goodies”.

2. – then when the govt makes the same decisions that you as an individual would make – to decide when the costs exceed the benefits – we say the govt is a “death panel”.

the way we end up here is because people who are opposed to the govt being involved in health care will cite both 1 and 2 at different times to demonstrate that the govt approach is “wrong” even as they ignore the fact that the same approach is also used by private insurance and by individuals using their own money.

Heaven knows, there is a lot to dislike from the govt approach but it’s silly to hold it up as unique to private or individual approaches.

Note the date of the article. The problem was primarily local, and it wasn’t based on age, but the likelihood of patient benefit. In any case, that situation has been somewhat alleviated with most regions now meeting standards of care, though some people still have to travel long distances for care. The current problems are the increasing numbers of kidney patients due to obesity, and the lack of viable kidney organs for transplant, which will continue to put strain on dialysis resources.

The problem was primarily local, and it wasn’t based on age, but the likelihood of patient benefit.

Which was based on age. Did you not read the story?

In any case, that situation has been somewhat alleviated with most regions now meeting standards of care, though some people still have to travel long distances for care.

Somewhat? What does that mean. Is the standard of care to refuse older patients access? I guess we’re going to have to take you at your assertion because you provide no source for your information. Sorry. Gonna need a link.

Suppose, though, that dialysis is not mostly available. I don’t think it matters to those people who died because they were denied dialysis. You leftist screech the moment a private insurer denies someone expensive Hail Mary procedures, but aren’t bothered at all when scores of people die because they’re denied to an old, effective and relatively inexpensive technology in a sclerotic socialized system.

The current problems are the increasing numbers of kidney patients due to obesity, and the lack of viable kidney organs for transplant, which will continue to put strain on dialysis resources.

Who cares why there’s more demand for dialysis? Markets always adjust to meet demand so that there are no shortages. You have a “strain on resources” only because medicine is socialized and thus supply is artificially constrained. That’s the entire point. Your socialized utopias are worse than your worst complaints about markets.

It means nothing’s perfect. People sometimes have to travel, which can be a burden.

Methinks: You leftist screech the moment a private insurer denies someone expensive Hail Mary procedures, but aren’t bothered at all when scores of people die because they’re denied to an old, effective and relatively inexpensive technology in a sclerotic socialized system.

In this case, the screeching was by those who generally support the NHS, but wanted to call attention to deficiencies. In addition, the technology had changed considerably in effectiveness.

Methinks: Markets always adjust to meet demand so that there are no shortages.

Not always. Markets *tend* to adjust over time to meet demand defined in part by ability to pay.

Methinks: You have a “strain on resources” only because medicine is socialized and thus supply is artificially constrained.

That’s incorrect as well. There are strains in market systems. It’s the strains, all the various pushes and pulls, that makes markets so effective at reacting to conditions.

Markets, indeed, are much more effective at distributing most goods, and socialized systems tend to exhibit more frequent shortages, as well as higher prices. The problem is that few actually want a free market in medicine as it may mean letting people suffer who can’t afford treatment. Every intervention distorts the markets. Even private insurance severely reduces the market signal.

Markets are not supply constrained. Suppliers have every incentive to increase their market by reducing price so that their product is affordable to the largest market possible. There is no such incentive for socialized system.

And, most importantly, I’m still waiting for even the smallest scrap of evidence that your assertion that the NHS no longer severely rations dialysis is true. Your word just isn’t enough.

You never stop to wonder why there are no supply shortages in market economies – AND there are no dark stories of people dying because they can’t afford dialysis (whatever “afford” means – usually that people don’t want to make trade-offs). Those only happen in socialist systems. Weird.

Our intent was to ensure that your definition of demand is the same as ours. Your inclusion of the phrase “ability to pay” in your attempt to refine Methinks’s statement about economic demand was superfluous, and led us to believe you might be going somewhere else with it – something you, in fact, did shortly after.

Z: “The problem is that few actually want a free market in medicine as it may mean letting people suffer who can’t afford treatment.

“Every intervention distorts the markets.”

Yes. Good.

“Even private insurance severely reduces the market signal.”

You must mean healthcare plans. True insurance would have little effect.

So Methinks’s statement: “Markets always adjust to meet demand so that there are no shortages. ” – is essentially correct.

Z: “That’s incorrect as well. There are strains in market systems. It’s the strains, all the various pushes and pulls, that makes markets so effective at reacting to conditions.

Markets, indeed, are much more effective at distributing most goods, and socialized systems tend to exhibit more frequent shortages, as well as higher prices.

And yet it appears you prefer the less efficient and more expensive socialized system, despite it’s failings. Go figure.

Methinks: It’s not the criteria for you because you didn’t read the article.

Yes, we did read the article. First, there was no specific age cutoff, as was claimed above. Most people on dialysis in Britain are over 65. Second, according to the article, the criterion was highest chance of survival.

Methinks: Markets are not supply constrained.

That’s just silly. Of course markets are constrained. That’s the whole point. Scarcity is the fundamental problem of economics.

However, markets are flexible in their response to scarce supply. Sometimes it can mean increased production. Sometimes it means finding other sources. But often it means prices increase until equilibrium is reach and some people are priced out. Markets ration based on ability to pay, and some people are priced out.

As for the NHS, as we said, there is still a lack of access to nearby renal dialysis centers in some areas, but most are served. However, rationing is occurring in other areas of medicine.http://www.bbc.co.uk/news/health-18143085

Z: “hat’s just silly. Of course markets are constrained. That’s the whole point. Scarcity is the fundamental problem of economics.

Either you are confusing the terms “shortage” and “scarcity”, or you are playing a word game. we suspect the latter.

In a discussion of kidneys and dialysis it’s appropriate to say that shortages would not exist, except as marginal fluctuations, if markets were allowed to operate.

In the case of replacement kidneys, an artificial supply constraint creates a permanent shortage, and keeps prices out of reach of all but a lucky few. In the case of dialysis, the curious notion that prices can be controlled by edict has the same effect.

Z: “However, markets are flexible in their response to scarce supply. Sometimes it can mean increased production. Sometimes it means finding other sources.”

Good

Z: “But often it means prices increase until equilibrium is reach and some people are priced out. Markets ration based on ability to pay, and some people are priced out. ”

At which point greedy profit seekers enter the market to increase supply and drive prices lower.

It seems obvious to most people that only a market can balance supply and demand – something central planners can’t possibly do until they are able to repeal the law of supply and demand.

As to those that are priced out, you seem to ignore the role of generosity and compassion that most people have for others – especially loved ones. It seems you believe that money must be stolen from strangers to pay for their needs. How bizarre. Who gets to decide that?

Why do you suppose there aren’t major problems of limited access in the relatively freer market for food – something that is even more critical than medical care?

“Insurance is known to dilute market signals by interposing a third party between producer and consumer. It’s very difficult for the third party to control costs, hence it leads to medical inflation. ”

High deductible catastrophic health insurance should have a minimal effect on most medical care decisions and prices.

Free market means choice: voluntary transactions and associations. Period. If it isn’t voluntary it isn’t free market. Government doesn’t offer “insurance” as we understand it, because there isn’t a choice. competition for government services isn’t allowed.

“Medicare Part B, C and D are entirely voluntary and no one pre-pays a penny into any of them.”

That’s absolutely not true. Those plans are subsidized by taxpayers. Why do you think people complain about them? How do you suppose it is – as you yourself point out – that part B provides a benefit valued at $400/mo for $100/mo?

You will also find that Part B is assumed to be in force by employer retirement plans and they pay less, accordingly, at age 65.

Healthcare plans also assume part B is the primary insurer for those over 65 and pay accordingly.

Part B is voluntary in the sense that you can choose to go without it and pay the first 80% of your medical expenses yourself.

That’s absolutely not true. Those plans are subsidized by taxpayers. Why do you think people complain about them? How do you suppose it is – as you yourself point out – that part B provides a benefit valued at $400/mo for $100/mo?

they’re voluntary in the sense that people do not pre-pay for them.

Medicare B,C,D is sold on a transaction basis – does not require participation.

Part A is mandatory and requires pre-pay.

“You will also find that Part B is assumed to be in force by employer retirement plans and they pay less, accordingly, at age 65.”

yup, including the US military.

“Healthcare plans also assume part B is the primary insurer for those over 65 and pay accordingly.”

not necessarily. You can still buy a plan that is primary and does not count on Medicare.

“Part B is voluntary in the sense that you can choose to go without it and pay the first 80% of your medical expenses yourself.”

you can choose to go without it. If you do buy it, it will require a 20% co-pay but Part C is tax-payer subsidized “GAP” coverage that pays much if not all the 20%.

Part C has destroyed the original Medicare premise that the 20% skin in the game would incentivize some to not seek some kinds of therapies and care if they had to kick in 20% of it.

People prepay for them through their taxes. That is not a choice. Not sure why you think you can spin it some other way.

“Medicare B,C,D is sold on a transaction basis – does not require participation.”

Workers must pay for it all their working lives but needn’t choose to receive benefits at a subsidized price when they reach age 65. This is not a product people would choose voluntarily. It is forced on them.

At least tell me you understand the difference between choice and coercion.

People prepay for them through their taxes. That is not a choice. Not sure why you think you can spin it some other way.

I’m describing the essential nature of Medicare B,C,D compared to Medicare A – in terms of what is mandatory and what is not required – for the consumers.

your “angle” here has no more relevance than if I came back and said that taxpayers pay for the pensions and health care benefits of active and retired military.

so what?

We’re talking about Medicare and whether or not people are forced to buy it and they are not. It is entirely voluntary.

“Medicare B,C,D is sold on a transaction basis – does not require participation.”

Workers must pay for it all their working lives but needn’t choose to receive benefits at a subsidized price when they reach age 65. This is not a product people would choose voluntarily. It is forced on them.

they’d not “voluntarily” pay taxes on a wide range of things in that same way. so what? They also pay for military pensions and renditions and torture in foreign countries – right?

At least tell me you understand the difference between choice and coercion.

at least you tell me you understand the difference between paying taxes for something you don’t want to pay taxes for verses the mandatory or voluntary nature of an insurance program the govt offers to people.

The FEMA flood program is subsidized by tax payers and it sells insurance to people who voluntarily choose to buy it and yes their taxes pay for it also.

so what?

you are purposely trying to confuse the issue here nimrod.

People are NOT “forced” to buy Medicare. That’s the essential point. It is an entirely voluntary program – and yes it is subsidized LIKE a lot of other VOLUNTARY programs are.

“I’m describing the essential nature of Medicare B,C,D compared to Medicare A – in terms of what is mandatory and what is not required – for the consumers.”

We don’t care about the essential nature of taxpayer funded programs like medicare.

You asked whether free market advocates considered insurance to be a socialist concept, and the answer is no. Insurance and pooling of risk are common practices that have been used throughout history, and is fully compatible with a free market.

Free market advocates dislike any program that is forced on them by government by any name you want to call it.

“your “angle” here has no more relevance than if I came back and said that taxpayers pay for the pensions and health care benefits of active and retired military.”

Military employees are public employees. They are paid combinations of wages and benefits just like any private employee. What they earn comes from the public funds. It is not an entitlement or transfer payment of any kind.

“We’re talking about Medicare and whether or not people are forced to buy it and they are not. It is entirely voluntary.”

It is not entirely voluntary. It is partly funded through involuntary taxes.

“Medicare B,C,D is sold on a transaction basis – does not require participation.”

Workers must pay for it all their working lives but needn’t choose to receive benefits at a subsidized price when they reach age 65. This is not a product people would choose voluntarily. It is forced on them.

“they’d not “voluntarily” pay taxes on a wide range of things in that same way. so what? They also pay for military pensions and renditions and torture in foreign countries – right?”

Given a choice, people wouldn’t voluntarily pay taxes at all. That’s why they’re called taxes. your comments is moving away from a discussion of insurance as a free market concept.

Me: “At least tell me you understand the difference between choice and coercion.”

You: “at least you tell me you understand the difference between paying taxes for something you don’t want to pay taxes for verses the mandatory or voluntary nature of an insurance program the govt offers to people.”

I take that as a no. You do NOT understand the difference between choice and coercion.

“The FEMA flood program is subsidized by tax payers and it sells insurance to people who voluntarily choose to buy it and yes their taxes pay for it also.:”

Not sure why you pointing to another program that is partly paid for through theft and isn’t insurance but a subsidized benefit program with a token premium schedule to make it sound legit. You are easily manioulated by smooth talking politicians.

“you are purposely trying to confuse the issue here nimrod.”

I don’t have to try. I thought I was pretty clear, but you’re confused anyway. No surprise.

“People are NOT “forced” to buy Medicare. That’s the essential point. It is an entirely voluntary program – and yes it is subsidized LIKE a lot of other VOLUNTARY programs are.”

So what? We were discussing insurance as a free market concept, with premiums that reflect the assessment of risk, not government subsidized transfer programs.

lyle: “since at least a part of the 9 year extension of life expectancy since 1958 is due to medicare”

methinks: “Why do you say it’s due to medicare?”

I don’t know any way to prove whether medicare spending improved life expectancy. But didn’t medicare change the priorities for medical research? Spending for treatment of age-related diseases was suddenly guaranteed with the passage of Medicare. Wouldn’t that by itself increase the incentives for pharmacuetical companies and medical equipment companies to work more on those diseases?

I don’t know, John. But, I would think that an aging population living longer would have also inspired the same shift in research priorities as the market for age-related concerns would have increased. As far as I know, there’s no state funding for cosmetic anti-aging products and that market is booming. The rate of progress in anti-aging technology (a matter I take a keen interest in!) is astonishing.

methinks: “I would think that an aging population living longer would have also inspired the same shift in research priorities as the market for age-related concerns would have increased.”

I don’t think we can ignore that millions of aging Americans suddenly had medical insurance coverage. Prior to Medicare, many seniors simply could not have afforded the expensive treatments for age-related illness.

That the population of seniors increased was not so important as the fact that such seniors could suddenly pay for the advances in medical care, IMO. Or, rather, that taxpayers were suddenly paying for those advances in medical care.

It’s possible. However, there wasn’t much to pay for before medicare was introduced in 1965. Medicine has advanced tremendously since then and I don’t think we can attribute that to Medicare.

However, we don’t know what the creation of medicare prevented from coming to fruition. How do we know that private providers wouldn’t have developed technologies that deliver better care at a lower cost to a growing market? We know that providers in the United States don’t compete for healthcare dollars on the basis of quality or price, keeping the cost of medicine high.

I find the affordability argument a little difficult to accept. I now live in Florida and I regularly see seniours of relatively modest means spending tens of thousands of dollars out of pocket for laser treatments, facelifts, injections of botox and myriad of other pricey, unsubsidized treatments merely too look and feel good. Those procedures have been improving while the cost has been dropping as a result of competition and lack of third party payers. I find it hard to believe these same spry seniors would skimp on medical necessities. Especially if the prices of those necessities benefited from the same competitive pressures as cosmetic procedures.

methinks: “we don’t know what the creation of medicare prevented from coming to fruition”

Well, that’s related to my argument. As I see it, Medicare funds attracted innovation and capital investment which would have otherwise been focused on different problems. Priorities for medical talent and medical technological research shifted because seniors suddenly commanded far more health care dollars than they otherwise would have.

methinks: “I regularly see seniors of relatively modest means spending tens of thousands of dollars out of pocket for laser treatments, facelifts, injections of botox and myriad of other pricey, unsubsidized treatments merely too look and feel good.”

Not sure how you define “relatively modest means”. Spending tens of thousands of dollars on elective surgeries implies, to me, something more than “modest means”.

Perhaps I wasn’t clear. I was referring to the late 1960s and 1970s, immediately after Medicare was implemented. I don’t think the upper middle income senior was common back then. Accumulating wealth was much more difficult in the 1930s and 1940s than it was in the 1980s and 1990s.

This is about finance. If the additional years entirely consuming, without adding anything to net production, the ROI of those years is zero.

We can, as a society, choose to spend money on things that have zero ROI, just as an individual or a corporation can. But there’s a limit. Beyond that limit, you’re reducing the total capital available for productive use – then the economy is either growing very slowly, or actually shrinking.

“This is about finance. If the additional years entirely consuming, without adding anything to net production, the ROI of those years is zero.”

You might want to make a distinction here between additional years spent consuming the production of others and additional years spent consuming one’s own previous production accumulated through previously deferred consumption.

“Nevertheless, capital spent on consumption reduces the total amount of capital available for investment, regardless of the source of that capital.”

actually, no. this is not that simple.

let’s say you buy an ipad. that money goes to apple. they then have it to spend on R+D and other sorts of investment to grow the company. your consumption becomes investment and tends to be good investment because it flowed to a company that has already demonstrated an ability to produce goods and services that you value.

consumption decisions are a way of allocating revenues and profits to good providers of goods and services and, as such, have a large effect on which firms have money for future investment.

if fact, this effect is often more proximate than if you were to buy apple stock with the same money. simply buying apple stock in the open market does not pay apple anyhting. it simply increases the share price and might help apple raise money more cheaply later if they choose to do an offering, but right now, it gives them nothing as opposed to you purchase of an ipad which immediately gives them cash from the profit.

the logic of the flow you laid out seems flawed in this respect. much “invested” money is not really “invested” at all in the sense that firms could use it to build a factory or do R+D. it merely helps set a price at which companies could raise capital.

of course, this gets even more complex because someone sold those apple shares too, got cash, and we have no idea what they plan to do with it.

even the “accumulate” open you describe is far more complex that your scenario. it’s not like firms put cash into a big mattress. they put it in banks that lend. they buy bonds. they invest in commodities that they will need later.

the system you are trying to lay out is far too simplistic and misses much of what happens in the actual economy as a result.

no. these are things YOU may not think are good. once more you seem to be trying to force your own values of good onto everyone else.

if i like beer and choose to buy it and therefore fund more investment in the alcoholic beverage industry, some might call that bad. but to me, it’s good. i like beer.

we could say the same about any of the things you cite.

this whole notion of “good” that you cite it as impossible to define from the top down as it is irrelevant.

people make their own choices about what they want. so long as those choices do not violate the rights of others (as slavery would) they the sum of all these decisions is what defines “good” not some abstract idea that you wish to try to push on people from the top down.

you are claiming to know what is good for a society while ignoring the actual opinions of the people in it as demonstrated by their consumption choices.

who are you to say that drug or pornography is bad and force me to agree?

so long as i have not violated anyone’s rights and engaged in consensual, voluntary commerce then such commerce is, by definition good.

if you sell me somehting i buy it because i value it at more than the price. you sell it because you value it less. we are both made better off.

so long as that transaction does not violate someone’s rights, how could somehting that makes both parties better off be described as anyhting but good?

if you buy somehting, you do so because you feel it is beneficial to you. if i sell it to you, it is because i think i will be better off by doing so.

if your and my welfare increases, so does society’s.

your entire logic here is flawed because you are starting from some top down notion of claiming you KNOW what is best for society and therefore all the people in it instead of realizing that such knowledge is impossible and that the only way to really get that answer is to let people be free to choice instead of your one size fits all thinking.

surely you agree that people value different things.

why is your preference for a ford f-150 any different than mine for a 2007 dunn valley cabernet or someone’s enjoyment of pornography?

precisely how is it you feel entitled and able to render such judgments for everyone?

I can think of all sorts of things that people would buy that would be funneled into more investment to feed that demand… but not for stuff that would be beneficial to society ….”

Society doesn’t consume anything, individuals do. Every decision to consume is made by an individual, therefore only that individual can decide whether that is a good or bad decision. No one else, especially you, can’t make that value judgment for them.

that might have been true when the entitlements funded themselves. however, as they now slip deep into the red, they are funded by income tax or, more honestly, by debt, which, ultimately, is still income taxes, just deferred ones.

social security and medicaid cost $1.6tn a year.

fica raises $820bn. that is a nearly 800bn shortfall. fica income is paying barely half of entitlements and this % is going to keep dropping due to demographics.

entitlements re not “largely financed by payroll taxes”.

payroll taxes barely cover half.

defense has been dropping at % of gdp for decades while entitlements have (and will continue to) soar.

can we cut defense, sure, absolutely, but we can cut it to zero and still not balance the budget.

it is not the only problem or even the major one right now, much less over the next 20 years of the boomers retiring and consuming more public healthcare.

re: FICA – was never intended to pay for MedicAid which is intended for the indigent…. and a legitimate tax-funded expenditure – the issue is how much.

SS and Medicare Part A(only) is funded from FICA.

DOD+ National Defense spends about 1.3 trillion a year

Our total income tax revenues are about 1.3 trillion a year and this does not include the VA and other military-related expenses to society which includes substantial tax breaks for active and retired military.

that gives a much better perspective of our finances and allocate of taxes than using GDP.

no. it’s an annual number, remember? you cannot take several years and pile them all into one.

re fbi- no, it’s not defense. it’s law enforcement.

re: energy dept-

that is not what they are doing. all those reactors and weapon systems are made by private companies and paid for out of the regular dod budget.

the nasa claims are double counting. milsats are paid out of the dod budget, not the nasa budget.

homeland security is mostly pork. (and hideously unconstitutional porkl post patriot act) we could argue about what bucket to put it in, but i just needs to be cut.

coast guard is already in the dod figures.

that wiki piece is fraught with double counting and bad estimates.

also note that this was wartime spending and elevated as a result, particularly around the VA. wounded soldiers cost money.

we take in about $1.4 tn in income taxes. milspend is $800-900bn.

we take in $800 bn in fica and spend twice that on SS and medi and that’s going to get a helluva lot worse over the next 10 years as the boomers retire.

by 2025, then entire us federal revenue base will not be able to pay for just entitlements even before we pay interest on the debt.

there is no question that we can and ought to spend less on defense, but that could go to zero and still would not prevent deficits. to claim that defense has been (and even more ss will be) the big problem is simply counter to fact

and you never hear of cutting entitlements for military who can retire will full benefits at 20 years and never have served in a combat zone their whole career.

you hear talk of SS “unfunded liabilities” over a 75-year actuarial horizon but not the military pensions.

the military could pay soldiers a wage and let them go out into the free market to find their best, least expensive care but they don’t. They provide taxpayer-subsidized TRICARE for them and their families, the VA for those with injuries and pensions.

If the military did not provide entitlements but instead only provided salaries and let soldiers buy their own health care – in the free market – it would make it much easier to tell civilians to do the same thing, eh?

“and you never hear of cutting entitlements for military who can retire will full benefits at 20 years and never have served in a combat zone their whole career.”

Even though rjs thoughtfully provided you a Wiki definition of the word “entitlement” so you might better understand the meaning of the word, I suspect that you either didn’t bother to read it or didn’t understand what you read.

As commonly used in the context of government payments to individuals, an “entitlement” is money transferred through taxation from someone who earned it to someone who didn’t.

Note that borrowing to fund entitlements creates a claim on *future* tax revenue, so the above is still correct.

A government employee pension on the other hand, including a military pension, is part of an employment agreement. The people receiving the pensions are the ones who earned it.

Whether you believe those employment agreements are reasonable, or whether government retirees deserve those pensions, are different issues – but military retirement benefits are not an entitlement.

If Mr. Grannis had been a little more clear-thinking, he would have mentioned 5) spending hundreds of billions each year on blowing up countries that present no security threat to the United States, and defending countries that can afford to pay for their own military. Unless he can explain how that is a productive use of borrowed money….

Methinks, I’m sure a country, like China, or a group of countries, e.g. in the Middle East, Latin America, Russia, North Korea, etc., would want the U.S. to move towards isolation and give up its world empire.

“Fears resulting from China’s growing military spending should lead to enough U.S. sales in South and East Asia to more than offset a slowdown in European arms-buying.

Overall, the United States reached arms transfer agreements in 2011 totaling $66.3 billion, or nearly 78 percent of all such worldwide pacts, according to the nonpartisan Congressional Research Service. The 2011 total was swollen by a record $33.4 billion deal with Saudi Arabia. India ranked second with $6.9 billion in such agreements.

December’s election of conservative, pro-American leaders in Japan and South Korea could further fuel sales, demonstrating U.S. solidarity with allies and partners.

The Obama administration says arms sales are an increasingly critical and cost-efficient arrow in its quiver to defend U.S. worldwide interests.

Such transfers reinforce diplomatic ties and promote long-term partnerships. They also are prized by Washington because they make it easier to fight side by side in places like Afghanistan and help allies do more for their own defense.”

Are there beavers building dams that obstruct the passage across the pacific? Are you claiming that China would block its own ships carrying goods to the United States? Seriously, what’s this spooky threat you imagine? And if there is a real threat, who should pay for the clearing of the passage: the parties who directly benefit from the trade or taxpayers who do not? Do you suppose that oil exporting countries are less interested than the United States in ensuring the safety of their tankers? Since you understand that government is inefficient and largely useless.

It’s amazing to me that conservatives who understand that government’s vast inadequacies and inefficiencies suddenly suspend that understanding completely when the subject is the military.

“Are you claiming that China would block its own ships carrying goods to the United States?“…

Are you feeling OK? I mean where did I mention China?

“It’s amazing to me that conservatives who understand that government’s vast inadequacies and inefficiencies suddenly suspend that understanding completely when the subject is the military“…

No methinks what’s really amazing is your complete inability to understand a simple question then go off on some kind of indescribable tangent…

Take another look and see the simplicity in the oriiginal question: ‘is it better to have American bases in the mideast to keep sea lanes open or should we just hope that someone else takes on that job?‘…

Where is this alledged ‘suspended‘ anything you blather on about?

Personally I was all about the ‘hope‘ myself since other countries have as much or more to lose and are a damn site closer to the situation…

Turning over the keys to CVN-70, the carrier Carl Vinson, to the Chinese navy is probably on the schedule for the near future, not only for the above reasons but also because the US won’t be able to afford to operate it and it’s a military anachronism. Do we really need 11 aircraft carriers to “keep the sea lanes open”?

re pirates: I don’t feel obligated to subsidize the security of cargo ships or fools who wander into pirate-laden terroitories. Let them provide their own security at their own expense.

Are you feeling OK? I mean where did I mention China?

I live in Oblamebush’s USSA and Oblundercare begins kicking in this year like the outer-band of an encroaching cat 15 hurricane. So, no. No, I’m not alright. Thanks for asking. You didn’t mention China. I did – in an effort to figure out what you’re going on about. What do you think is going to happen in the Pacific that is such a threat to national security – the only legitimate use of the military.

Personally I was all about the ‘hope‘ myself since other countries have as much or more to lose and are a damn site closer to the situation…

Uh-huh. That’s what I said. If the chip on your shoulder weren’t blocking your view, you would have realized that.

“1. Of the 900 or whatever US military installations around the world how many are directly involved in reducing piracy?“…

Well ron h as far as I know or can remember off hand that any US military asset that ‘might‘ have been used to ward of piracy (could’ve been terrorists instead) was a few years back in the Red Sea when some boats were chasing down an LNG carrier and a US frigate intervened…

BTW of those 900 supposed military installations around the world how many of them field combat ready response teams with air and water assets?

I’m guessing not that many…

“2. According to your own link, piracy is alive and well, so it appears the US military presence doesn’t work very well as a deterrent“…

The US doesn’t actively, ‘officially‘ participate in anti-piracy actions…

The Dutch, the Germans, Belgians, and even the French are far more involved…

“3. I would expect pirates to *want* shipping lanes to be open so they would have a continuous supply of shipping to pirate“…

Come on now ron H, you can’t have it both ways…

The very action of piracy makes that particular sea lane close off, hence more expensive and more time consuming routes have to be used…

“I have a question though methinks is it better to have American bases in the mideast to keep sea lanes open or should we just hope that someone else takes on that job?

I guess the same sort of question would also apply for an American presence in the Pacific…”

and then this:

Methinks: “Are there beavers building dams that obstruct the passage across the pacific? ”

juandos: “<i.Why yes there are methinks, they’re a species called pirates and they’re not confined to the Pacific.”

Hence my questions: Your question to Methinks implies that military presence in the Mideast is keeping sea lanes open, your reference indicates that piracy is common, then you claimed that piracy closes sea lanes, so it would seem that US military presence is of little value in combating piracy.

I’m not sure what connection there is to US military presence and piracy in the Pacific.

ron h says: “Your question to Methinks implies that military presence in the Mideast is keeping sea lanes open, your reference indicates that piracy is common, then you claimed that piracy closes sea lanes, so it would seem that US military presence is of little value in combating piracy“…

ron h I’ve implied nothing of a sort and I don’t use the whole ‘implication thingie‘ very much if at all…

Considering we have a navy in the middle eastern area for something else entirely maybe some of the spin off of its presence there might be the mitiigation of some pirate activity…

One need only to travel a relatively short distance from middle eastern waters to the Indian ocean to see just how ineffective even a large naval presence can be…

Are you under the impression that maritime companies would intentially sail their shipping through areas of known pirate activity?

“I’m not sure what connection there is to US military presence and piracy in the Pacific“…

There isn’t any as far as I know US any type of armed forces specifically targeting piracy…

By and large even a very strong naval presence of any country in the Pacific ocean is fairly ineffective, there way to much area to patrol…

Short of having timely and accurate intelligence on where pirates base themselves most intercepted pirate activity is pure chance or after the fact…

Do you know something about our national policy regarding piracy that I’m unaware of?

I don’t know what methinks was doing or thinking when she went off on the rant about beavers, damns, and China…

“This is a bizarre conversation. I think we are both arguing the point that the US Navy has little effect on pirates, and and in fact, has no mission or policy regarding pirates“…

I do believe you’re right ron h…

“Yes I am. The gulf of Aden is a well known hotbed of piracy, and merchant ships continue to use this route rather than taking longer routes“…

Now I ask you, if there was NO naval activity at all in that general vicinity would the oil and other products be worth retrieving as far as the maritime shippers are concerned?

The costs of higher (assuming it can be purchased in the first place) insurance rates, varied routes through area, and maybe onboard security of some sort would sure seem to make it all an ‘iffy‘ proposition at best…

I’m guessing the cost of ‘ransome insurance‘ will start to balloon fairly quickly once all the pirates are convinced that every ship and crew will be a soft spot…

“Now I ask you, if there was NO naval activity at all in that general vicinity would the oil and other products be worth retrieving as far as the maritime shippers are concerned?”

Based on our agreed opinion that navel activity has little effect on piracy, the answer must be yes. NO navel presence would make little difference.

“The costs of higher (assuming it can be purchased in the first place) insurance rates, varied routes through area, and maybe onboard security of some sort would sure seem to make it all an ‘iffy‘ proposition at best…”

Ransom insurance as well as armed security services are readily available. The power of the market, you know.

The trouble with armed security is that many ports deny docking to ships that are armed, so that such services must be placed on board prior to traveling through the danger zone, and then removed after the ship has passed through. Please don’t make me find references for that.

“I’m guessing the cost of ‘ransome insurance‘ will start to balloon fairly quickly once all the pirates are convinced that every ship and crew will be a soft spot…”

I believe the pirates are already aware of how easy it is to hijack a large ship. Most people, even on a large ship, don’t like being fired on by bozos with automatic weapons and RPGs.

“I doubt it, as far as I know there isn’t one“…

Yeah, I’ve not read anything like a policy either…

Considering the cost of modern US navy ships I guess its understandable why there’s no policy regarding piracy….

I don’t know how big a problem this piracy thing or whatever is, but Wah wah wah! Everybody’s job is tough. That’s no excuse for forcing taxpayers to subsidize the security of tankers owned by private interests. I don’t care about their port to port issues. Private enterprise has successfully negotiated far stickier situation without going crying to mommy for help!

For once in his life, Larry is right. It’s not the duty of taxpayers. And yes, yes I would like to pay less in taxes and more for my imports. The people who buy the good and benefit from the good should bear the full cost of the good. A person who does not want the import shouldn’t be forced to subsidize its arrival in the country.

indeed. in 2000 we had a mostly balanced budget and no structural deficit.

Two wars later (not paid for), a DOD budget that doubled, two new Medicare entitlements (not paid for), and a tax-cut that did not come close to paying for all the increased spending, we had a mounting deficit that got even worse when the economy tanked and reduced tax revenues even more.

Now we have 16T in debt and the folks who voted for it in 2000-2006 STILL do not want to pay for it nor do they want to cut the things they voted to increase – DOD and Homeland security – as well as entitlements..

“indeed. in 2000 we had a mostly balanced budget and no structural deficit.”

We had dot com and Y2K bubbles that imploded just as Clinton was heading out the door. Nasdaq started tanking in March of 2000.

“Two wars later (not paid for), a DOD budget that doubled, two new Medicare entitlements (not paid for), and a tax-cut that did not come close to paying for all the increased spending, we had a mounting deficit that got even worse when the economy tanked and reduced tax revenues even more”

Sure, the GOP wasted too much money on failed liberal programs during a time where the spending looked far more affordable. If you were honest, you’d support their efforts to roll back the excess. Instead, your hero is the king of reckless spending:

” We had dot com and Y2K bubbles that imploded just as Clinton was heading out the door. Nasdaq started tanking in March of 2000.”

bullfeathers… what did those things actually do to the budget?

re: ” Sure, the GOP wasted too much money on failed liberal programs during a time where the spending looked far more affordable. If you were honest, you’d support their efforts to roll back the excess. Instead, your hero is the king of reckless spending:”

no.. it’s WORSE than the GOP spending too much money. Because they’re the same ones who say we have a spending problem right now but are unwilling to roll the spending back – across the board, including DOD – to the levels before their spending sprees.

Obama is no hero but when the opposition claims to be fiscal conservatives but they won’t actually cut spending and continue to vote in favor of CRs and then oppose the sequester – which they insisted on at the prior debt ceiling fight – then they are hypocrites.

Obama and the Dems have always been tax & spenders and have never made no bones about it. It’s the GOP that claims they are fiscally responsible but in reality are feckless.

so let me get this straight — it is ok for the dems to tax and spend because they said they would, but the reps have to be no spending and no more taxes because someone said they should be that. So if the country goes to hell in a hand basket it is the reps fault since they didn’t stop the dems. This like have a conversation with a toddler. We need some ADULT leadership that cares about their grandchildren and the future than the current bunch of clowns.

The Dems have on more than one occasion agreed to cuts in spending… and the Dems have often been in favor of cutting DOD and farm and other business subsidies.

but the GOP has been traditionally in favor of balancing the budget – under Reagan, under Bush I, under Clinton, but not under Bush where they said “deficits don’t matter” and apparently meant it.

When you spend four years saying we have a “spending” problem and the same folks who are saying this – where the ones under Bush who voted for spending increases, they lack credibility as fiscal conservatives.

Did you direct the welfare reform link to me? I’m assuming you just fat-fingered the keyboard because surely you didn’t point to a 16 yr old GOP sponsored law that Clinton vetoed twice as proof? This would be the same law Obama, among many Democrats, adamantly opposed at the time and is slowly overturning today as President.

This is your proof?

Incidentally, I’m really confused now because in this same thread you told us you supported Democrats because they never claimed to be anything but tax-and-spend liberals. They’re the absolute worst, but at least they aren’t hypocrites!

Now you’re saying, they really are willing to be fiscally responsible, and are on record for being so.

“The Dems have on more than one occasion agreed to cuts in spending… and the Dems have often been in favor of cutting DOD and farm and other business subsidies.”

vs:

“I’m blaming the Dems also but the Dems have never promised to be fiscal conservatives in the first place.”

Larry’s intellectual dishonesty is on full-display here. He’ll say anything he thinks he can get away with to protect his hero Obama, and also the government programs Larry depends on now, and probably has his whole life.

” Bill Clinton signed PRWORA into law on August 22, 1996, fulfilling his 1992 campaign promise to “end welfare as we have come to know it.”[2]”

16 yrs ago Clinton signed the GOP sponsored bill after vetoing it twice, of course. Barack Obama and multitudes of other Democrats howled about the cruelty.

Funny how you can’t seem to find anything more recent than an act that was signed before blogs were invented.

“but I did not say that. What I said was that the idiots who want cuts think the Dems ought to be the ones to do them when their history suggests otherwise.”

You told us the Democrats were openly tax-and-spend so they weren’t hypocrites. Then later you told us Democrats were reasonable budget cutters after all.

“it’s not hypocritical to tax & spend and to advocate for doing it.”

Obama appointed 2 deficit commissions. He promised to cut the deficit in half by 2012. He falselyclaimed he cut a trillion dollars in spending just 2 days ago. I’ve pointed this out several times now, and once again you’re either too stupid or too dishonest to acknowledge it.

“It IS hypocritical to advocate for less spending and cuts to spending and to vote the opposite like the GOP does.”

It’s hypocritical to call for deficit reduction, like you do, and then back the people who are roadblocking that deficit reduction.

It’s also hypocritical for Obama to call George Bush “unpatriotic” for running up half the debt in 8 yrs what Obama ran up in 4. But you’re too dishonest to admit that.

Larry the liar, you made the statement “in 2000 we had a mostly balanced budget and no structural deficit.”

Are you capable of grasping how the end of an artificial boom would effect future projections, revenues, and stabilizers? Serious question, I’m not sure you do given the moronic tripe you post here regularly.

“Obama and the Dems have always been tax & spenders and have never made no bones about it. ”

You are seriously still posting this after being thoroughly debunked earlier?

Proof positive you’re simply a liar and not worthy of any response not laced with venom and mockery.

“wasn’t it the idiots under Bush that said “deficits don’t matter”?”

I disagree with the sentiment, but that was said during years of vastly smaller deficits. I’ll take “deficits don’t matter” and $200-$300 billion deficits any day over Obama routinely appointing deficit commissions and then ignoring them while running trillion dollar deficits any day.

re: ” I disagree with the sentiment, but that was said during years of vastly smaller deficits. I’ll take “deficits don’t matter” and $200-$300 billion deficits any day over Obama routinely appointing deficit commissions and then ignoring them while running trillion dollar deficits any day.”

do you mean vastly smaller deficits right after the Clinton years, not to mention to Y2K and dot com years?

” I’d prefer the GOP cut more and be bolder, but the Democrats are the brick wall here.”

I’ve yet to see real specifics from the GOP, ESPECIALLY on the things they voted to increase spending on in the Bush years.

For instance, the GOP voted for Medicare Part D and C in the Bush years that essentially doubled the entitlement deficit for Medicare but I have yet to see a single proposal from the GOP to roll back Part C and D.

He cut Medicare so he could use the $ to show some smoke-and-mirror savings for Obamacare. He didn’t simply cut the budget, he moved the money around to help fund another unaffordable entitlement. That’s worse than leaving the money in the Medicare column.

Paul: We had dot com and Y2K bubbles that imploded just as Clinton was heading out the door. Nasdaq started tanking in March of 2000.

Real economic wealth was created during the 1990s, as the U.S. restructured its economy for the information age. The recession was the mildest of the post-WWII period after the longest peacetime economic expansion in modern U.S. history.

Paul: Instead, your hero is the king of reckless spending

Most of the spending is mandatory Congressional spending for programs, such as Medicare and Social Security. The budget made no attempt to address long term entitlements as that is something that has to be negotiated with Congress. Here’s the FY2013 numbers:

“If Mr. Grannis had been a little more clear-thinking, he would have mentioned 5) spending hundreds of billions each year on blowing up countries that present no security threat to the United States, and defending countries that can afford to pay for their own military.”

Yes, the list could have been much more extensive, but after presenting four examples of enormous waste Mr. Grannis may have felt that most readers got the picture, so that he could move on with the rest his argument.

Let’s be careful about assuming that the productivity of Medicare recipients is zero. Although the vast majority of those over 65 are retired, not all are. In fact, some of the most productive persons in America are seniors who still run profit-seeking enterprises. Furthermore, an investor – whether he is 25 or 75 – can still provide benefit to a capitalist economy by the decisions he or she makes about the deployment of capital.

You’re absolutely right about the over 65 crowd, but that’s not the point.

Medicare spending on today’s 65-year-olds will be $6 for every dollar the senior paid in. If the collective is deciding which person’s life to save, the 45-year-old wins. The “investment” will likely be cheaper and produces over a longer time horizon. Being productive and able to deploy capital well is all fine and good, but the amount it will benefit me will be less than it will cost me in taxes to keep him alive. To me, keeping a random old person alive a little longer is worth less than zero. This you will recognize as a problem of collectives making personal spending decisions that rightly belong with individuals. To the collective, the aged are seen as a group and as a group they are far less productive and not worth the expenditure. Yet another reason collectives (beyond a family) and collective thinking is evil.

No, Parrot, Medicare is not “voluntary” in any meaningful sense of the word.

You do NOT have the option to NOT pay medicare taxes. Then, you MUST enroll in medicare if you collect Social Security. No opt-out. Even if you were able to opt out (something over which Dick Armey sued, btw), Medicare has killed the private market in health insurance for the aged. What private entity can compete with the bankrupt government’s promise of all-you-can-eat health care for such a low price?

Part B cost real money for every retiree, Part D, while you don’t have to have it, is rigged so that you really have to take it. These are real costs.

I love the talk about how productive a post 65 year should be – while it maybe of interest to the younger readers, I have a funny feeling that the post 65 group would define it a little differently. It will be interesting if you keep thinking like this in 20 years.

“Part D, while you don’t have to have it, is rigged so that you really have to take it.”

not true. I know that for a fact.

“I love the talk about how productive a post 65 year should be – while it maybe of interest to the younger readers, I have a funny feeling that the post 65 group would define it a little differently. It will be interesting if you keep thinking like this in 20 years”

yup.. the picture changes when you get old(er) and find out that outside of Medicare – getting equivalent insurance is near impossible no matter the price.

I agree that most seniors are receiving more in benefits than what they paid in – at least on a nominal dollar basis.

What I object to is the implied argument from generation X and millenials that ALL seniors are unproductive sloths, who represent a drag on the U.S. economy. the truth is that many of the Greatest Generation are still creating jobs for younger Americans. And many of us Boomers will be doing so in our “senior” years. Many seniors will be deploying their amassed capital which will make possible many of the jobs for younger Americans – younger Americans who refuse to acknowledge that people older than them are contributing just as they are. Or who refuse to acknowledge that the Greatest Generation and the Boomers had something to do with this nation having the highest standard of living in the world.

Actually, I’m not so positive that even most seniors receive more in benefits than they paid in. At least not on a real dollar basis. The average expenditure per senior is no doubt very high. But it is insurance. I suspect that a small percentage of seniors – perhaps 10 percent – account for over half of the total medicare expenditures.

I suspect that a small percentage of seniors – perhaps 10 percent – account for over half of the total medicare expenditures.

I’m sure we can verify that with a little digging on the internet. However, even if that’s the case, insurance is supposed to take that into consideration and raise premiums for the entire pool to pay for it. Clearly that didn’t happen. Also, it’s not really insurance because it’s an inter-generational wealth transfer, isn’t it? It’s more of a Ponzi Scheme than insurance.

I agree that most seniors are receiving more in benefits than what they paid in – at least on a nominal dollar basis.

John, there’s no question they’re getting more benefits than they paid in on any basis – despite a refusal rate higher than that of private insurance. And that’s not the seniors’ fault either nor do I fault them for getting as much as they can from a system that robbed them both of money and choices in exchange for promises that will one day very soon be empty.

What I object to is the implied argument from generation X and millenials that ALL seniors are unproductive sloths…

Would these be the same gen-Xers who feel entitled to the comforts to which they’ve grown accustomed to be provided at your expense? Yeah… I find it annoying. But, please don’t think this is what I said. Furthermore, If you’ve saved (deferred consumption) for your retirement, what business is it of anyone else’s if you choose to spend your golden years on a golf course? And who cares what they think, bitterly clutching useless and expensive axe-grinding studies degrees behind the Starbucks counter? If they’re working at all.

Many seniors will be deploying their amassed capital which will make possible many of the jobs for younger Americans – younger Americans who refuse to acknowledge that people older than them are contributing just as they are.

You don’t need to justify your existence to anybody. And the collective won’t buy it anyway. Your capital will exist even after you die. Your life isn’t unique. Others can deploy that capital. You are just a cog in the machine. Collectivism at its best.

Or who refuse to acknowledge that the Greatest Generation and the Boomers had something to do with this nation having the highest standard of living in the world.

Oh, ho ho ho! Don’t be silly, John. That had nothing to do with your individual ingenuity, hard work, planning and risk taking. Oh goodness, NO! that was all the benevolent state working tirelessly to provide for Americans the life for which you’re trying to take credit. Me-oh-my. If it weren’t for our political overlords, we’d be Somalia. You didn’t build that. Obviously.

If Americans knew how much they pay for regulations, through higher prices and lower wages (which is a regressive tax), they’d buy much less.

Over-regulated America The Economist Feb 18th 2012

“A study for the Small Business Administration, a government body, found that regulations in general add $10,585 in costs per employee.”

******

The Regulation Tax Keeps Growing September 27, 2010

“The annual cost of federal regulations in the United States increased to more than $1.75 trillion in 2008…new policies enacted in 2010 for health care and financial services will increase this burden.”

******

A 2011 econometric study based on 50 years of data, “Regulatory Expenditures, Economic Growth and Jobs: An Empirical Study,” concludes:

“A 5% reduction in the regulatory budget, which equals about $2.8 billion in spending, increases GDP by roughly $75 billion and the number of jobs by about 1.2 million annually.

In recent years, however, the size of the regulatory budget has risen sharply, with the Obama Administration proposing numerous new regulatory agendas.

Each regulator (or employee of a regulatory agency) costs the American economy, at the margin, $6.2 million in economic output and about 98 private sector jobs each year.”

to wit: ” …For example, Crain and Crain’s estimate for economic regulations (which comprises more than 70% of the $1.75 trillion estimate) was developed by using an index of “regulatory quality.” One of the authors of the regulatory quality index said that Crain and Crain misinterpreted and misused the index, resulting in an erroneous and overstated cost estimate. Other commenters have also raised concerns about using the index to estimate regulatory costs, and about the regression analysis that the authors used to produce the cost estimate. Crain and Crain said that they believe they interpreted and used the regulatory quality index correctly. Crain and Crain’s estimates for environmental, occupational safety and health, and homeland security regulations were developed by blending together academic studies (some of which are now more than 30 years old)”

worse than that – the study does not identify the worst and most costly of the regulations which if it did, would be inherently useful but the report is broad brush – and based on erroneous assumptions and bad data – which is about par for the course these days when people write stuff with an agenda rather than objective and dispassionate and fact-based.

so you have a discussion about deficit and debt and it gets to this broad-brushed anti-regulatory tome….as supposedly a reason behind the deficit and debt?

geeze!! Come on Peak… we go from one ideological leap of faith to another here in AEI.

the argument could legitimately be made that the money might be better spent on other things but then we’re into values like – is it better to reduce and monitor mercury emissions from power plants or just let people die from the pollution?

Yours is the argument that more jobs would be created if ditch diggers were forbidden to use shovels and were instead required to use spoons.

Of course you, Larry, are one of the most prolific shovelers I’ve ever encountered. Even my tall boots aren’t adequate.

“the argument could legitimately be made that the money might be better spent on other things but then we’re into values like – is it better to reduce and monitor mercury emissions from power plants or just let people die from the pollution?”

Yeah, values like what things individuals prefer, and indicate through their buying decisions in the open market by voting with their dollars, rather that those values chosen for them by central planners.

well.. no .. I would agree that there is an issue of the value of the regulations but in terms of “job killing” … that’s propaganda.

“Yours is the argument that more jobs would be created if ditch diggers were forbidden to use shovels and were instead required to use spoons.”

well no.. not actually.. but lets say the ditch diggers wanted to use high explosives …or a large digger machine that destroyed other utilities and infrastructure.

this is where the regs come from.

Of course you, Larry, are one of the most prolific shovelers I’ve ever encountered. Even my tall boots aren’t adequate.

oh you are TOO MODEST with your own ..you’re VERY competitive on the guano production yourself!

“the argument could legitimately be made that the money might be better spent on other things but then we’re into values like – is it better to reduce and monitor mercury emissions from power plants or just let people die from the pollution?”

“Yeah, values like what things individuals prefer, and indicate through their buying decisions in the open market by voting with their dollars, rather that those values chosen for them by central planners.”

or voters “prefer” when given the choice between cheaper electricity but dirtier lungs…

this is where regs come from. Those that live downstream from the smokestacks who live shorter lives from breathing pollution – don’t see the same benefits as those that live upstream ….

but then that’s why we have a representative government on things like this.

Just so you don’t lose track, I copied your statement here. Your claim is that regulations create more jobs, and you’re correct. Just as forbidding shovels would create more jobs.

If you knew a little bit of economics, however, you would realize that those jobs don’t add to the value of the product or service, and only make it more expensive.

Central planning, in this case, has dictated the creation of those jobs which necessarily takes jobs from productive use, as determined by consumers voting with their dollars.

That means we are all poorer, including those with the non-productive jobs.

“well.. no .. I would agree that there is an issue of the value of the regulations but in terms of “job killing” … that’s propaganda.”

You might try to explain to someone whose job has been off-shored or automated, due to the regulatory burden on their former employer, that their job wasn’t killed by regulations.

Me: “Yours is the argument that more jobs would be created if ditch diggers were forbidden to use shovels and were instead required to use spoons.”

You: “well no.. not actually..”

Check your statement above. both regulations and requiring diggers to use spoons creates more jobs. The jobs that are killed are the better ones that aren’t created elsewhere. The seen and the unseen. Both regulations and requiring spoons makes us poorer and reduces our level of well being.

“ but lets say the ditch diggers wanted to use high explosives …or a large digger machine that destroyed other utilities and infrastructure.”

No, let’s not say some imaginary BS. Ditch diggers dig ditches. Explosives experts use explosives. Heavy equipment operators operate heavy equipment. Each are directed in their tasks by a plan that isn’t of their own making. A contractor who caused major damage to infrastructure through the idiotic actions you described would be out of business. The problem solves itself. Only competent companies and employees continue to get work.

Me: “Yeah, values like what things individuals prefer, and indicate through their buying decisions in the open market by voting with their dollars, rather that those values chosen for them by central planners.”

“or voters “prefer” when given the choice between cheaper electricity but dirtier lungs…”

Do you mean that people will vote to control other people? Oh, sure they will. That’s describes your preferred form of government. Of course in most cases, voters and consumers are the same people.

If you meant that people would ask for fewer regulations if they knew how much they added to the price of goods and services, then I agree, but your comment suggests that people would spend less on products and services if they knew how large a part of the price was due to regulation.

“So, keep paying higher prices.”

Higher than what? I can’t choose between regulated and unregulated in order to pay less.

“How much would you pay for climate change?”

I would not *choose* to pay anything for climate change, but if the cost of climate change regulations are imbedded in every product in my array of choices, then I can’t choose not to pay the additional amount, unless I’m willing to go without.

“I would not *choose* to pay anything for climate change, but if the cost of climate change regulations are imbedded in every product in my array of choices, then I can’t choose not to pay the additional amount, unless I’m willing to go without“…

Money saving, compact fluorescent light bulbs emit high levels of ultra violet radiation, according to a new study. Research at Long Island’s Stony Brook found that the bulbs emit rays so strong that they can actually burn skin and skin cells…

What are you talking about? Of course regulations have a huge cost. My one and only point is that I can’t choose to avoid the cost of regulation in the goods and services I buy any more than I can choose to avoid the cost of electricity used in producing those goods and service. The costs of all inputs are in there, hopefully at a total below the price I pay, or the product will cease to be available when the producer goes out of business.

Well, I did, because when they were first introduced they were incredibly cheap because you and other taxpayers helped me pay for them.

Since then, after learning of the problems, I’ve stocked up on an enormous supply of incandescent bulbs that should last the rest of my life, or until LEDs get cheap, or…until something else comes along.

“Ron, so, if Americans knew regulating climate change has a huge cost, they’d still buy it, because it’ll be in the cost of goods and services.”

Am I really doing that poor a job or are you being deliberately obtuse?

Try rereading my comments slowly, and I’ll give this one more shot before I consider it hopeless.

I can’t speak for other people, so I don’t know what they would buy, but I wouldn’t willingly spend a penny on climate change.

However, regulations of any kind – including those some fools deem necessary to save the planet – involve compliance costs that are necessarily part of the total cost of any good or service affected by that regulation, just as other costs such as labor, materials, taxes, electricity, insurance, capital equipment and building rent are included in the total cost, and must be reflected in the price consumers pay if the good or service is to continue being available.

Knowing that regulations represent 15% of the cost of a bag of cement I buy at Home Depot is no more useful than knowing that natural gas represents 30% of the cost of that cement. I can’t break out either of those costs and save money, nor can I buy cement somewhere else that is cheaper because it doesn’t include those costs.

He is correct that borrowing is bad when put to unproductive uses. However, Social Security has never increased the debt, it is other programs that have borrowed funds that were collected for social security purposes, that have increased the debt, and it is debt that is owed back to the social security system.

When lisiting the unproductive uses of debt he left out war. And it is incorrect to suggest that actually using funds collected for social security purposes for socials security purposes is an unproductive use of those funds. In the first place those are not borrowed funds, it is money collected for that express use, in the second place even if you onsider the funds as borrowed money, caring for elders is not an unproductive use, since the alternatives would cost even more.

“However, Social Security has never increased the debt, it is other programs that have borrowed funds that were collected for social security purposes, that have increased the debt, and it is debt that is owed back to the social security system.”

That’s just an accounting shell game. Money I pay for SS is money that can’t go towards paying other taxes. It all comes out of the same pocket and gets poured into the same federal sewer.

Further, the temporary surplus SS generated allowed politicians to hide the true size of the deficit which allowed them to spend $ on other programs they might not have without the SS “trust fund.”

re: ” Money I pay for SS is money that can’t go towards paying other taxes. It all comes out of the same pocket and gets poured into the same federal sewer.”

Nope. it’s called a earmarked fund and it cannot be spent for other purposes other than as a temporary loan that has to be paid back.

“Further, the temporary surplus SS generated allowed politicians to hide the true size of the deficit which allowed them to spend $ on other programs they might not have without the SS “trust fund.” ”

that’s 1/2 true. They still would have had the funds because they would have sold regular Tnotes to get the money.

What they did instead was borrow from the Trust Funds (more than 100 of them) instead of selling T-notes right away but eventually in each trust fund’s case, when the earmarked money is needed for it’s specified purpose then the Fed sells more T-notes to the public and gives the money back to the trust fund.

“Nope. it’s called a earmarked fund and it cannot be spent for other purposes other than as a temporary loan that has to be paid back.”

I don’t care what it’s called, nothing you wrote invalidates what I said.

“What they did instead was borrow from the Trust Funds (more than 100 of them) instead of selling T-notes right away but eventually in each trust fund’s case, when the earmarked money is needed for it’s specified purpose then the Fed sells more T-notes to the public and gives the money back to the trust fund.”

Super convoluted shell games that do nothing to refute the fact that the SS surpluses were used to mask the true size of the deficit

re: ” I don’t care what it’s called, nothing you wrote invalidates what I said.”

true. the law invalidates it.

“What they did instead was borrow from the Trust Funds (more than 100 of them) instead of selling T-notes right away but eventually in each trust fund’s case, when the earmarked money is needed for it’s specified purpose then the Fed sells more T-notes to the public and gives the money back to the trust fund.”

“Super convoluted shell games that do nothing to refute the fact that the SS surpluses were used to mask the true size of the deficit”

it’s not convoluted at all. the govt created dedicated funds that collect revenue – like the gas tax – and when that revenue is received, it is spent immediately on bills due.

it works much the same way in states. They receive sales and withholding taxes on a continuous basis and spend that money on bills due – knowing that longer term bills are also going to come due – and they are counting on future revenues to pay them.

the more germane point is that Congress explicitly designed virtually all of the trust funds to work this way on purpose.

You object to SS but you ignore the 99 other trust funds such as the military pension trust fund or highway road fund that work the same way.

“it’s not convoluted at all. the govt created dedicated funds that collect revenue – like the gas tax – and when that revenue is received, it is spent immediately on bills due.”

So? That doesn’t refute anything. FACT: SS surpluses were used to mask the size of the deficit. Other government programs undoubtedly expanded as a result, though it would be exceedingly hard to say by how much.

Nothing you have written about the mechanics undermines the truth of that. I think it’s the “truth” part that you really have a problem with.

“Isn’t that true no matter who makes the decision? Won’t it also be true when it is your turn in the barrel?”

No it’s not true no matter who makes the decision. Why do you have so much trouble understanding that all value is subjective?

And, how about quoting Methinks in context:

” To me, keeping a random old person alive a little longer is worth less than zero This you will recognize as a problem of collectives making personal spending decisions that rightly belong with individuals.

LarryG: It seems at times to me that some folks who profess to be “free market” find the CONCEPT of insurance, especially if provided by govt and or pooled groups – as socialism.

Yes, but there are markets in insurance. They compete to provide security (or the sense of security, at least) for the lowest price. The problem is that disasters can completely undermine private insurance. There is safety in size, and that results in too-big-to-fail, meaning the government is called on to act as an insurer or last resort, and that results in regulation. Because insurance is often only stressed during disasters, it means they compete to the bottom and don’t always offer the desired security.

and there is the concept of “contingency” funding and also the concept of “reinsurance” but the govt – at least the Feds have the concept that they “self-insure” which means they do not set aside money for future disasters.

but the govt also sells insurance way below what it ought to sell for – flood and health (Medicare).

The problem is that the evaluation of risk in private markets will tend towards minimizing catastrophes that occur only rarely. And people can’t easily evaluate the promises being made in terms of the financial strength of the insurer. That means when entire regions are struck, the insurance folds, and nothing gets rebuilt. That’s why government has been expected to be the guarantor of last resort.

“The problem is that the evaluation of risk in private markets will tend towards minimizing catastrophes that occur only rarely. And people can’t easily evaluate the promises being made in terms of the financial strength of the insurer. That means when entire regions are struck, the insurance folds, and nothing gets rebuilt. That’s why government has been expected to be the guarantor of last resort.”

Incentives matter. You have named the cause of what you perceive to be the problem in your own comment.

Ron H: Either you are confusing the terms “shortage” and “scarcity”, or you are playing a word game.

No. You had defended the statement “Markets always adjust to meet demand so that there are no shortages”. That is obviously incorrect. Of course there are shortages in markets. Sometimes crops fail and there is not enough for everyone. Sometimes there’s not enough widgets and factories are forced to shut down, and people thrown out of work. That’s a shortage by any reasonable definition.

Zachriel: But often it means prices increase until equilibrium is reach and some people are priced out. Markets ration based on ability to pay, and some people are priced out.

Ron H: At which point greedy profit seekers enter the market to increase supply and drive prices lower.

Sometimes no additional supply is immediately available. When that happens, it’s called a shortage. But that’s the whole idea. The scarcity leads to higher prices, tending to increased supply. It’s a process, though, so saying there can’t be shortages in market systems is an untenable position.

Ron H: It seems obvious to most people that only a market can balance supply and demand – something central planners can’t possibly do until they are able to repeal the law of supply and demand.

Don’t overstate. In most circumstances, markets are much more adept at balancing supply in demand.

Ron H: As to those that are priced out, you seem to ignore the role of generosity and compassion that most people have for others – especially loved ones.

It’s simply a fact that people will be left out. That’s the price of a free market.

Ron H: It seems you believe that money must be stolen from strangers to pay for their needs. How bizarre.

Leaving aside your loaded terminology, most people believe in democratic governance, so it is your position that would be “odd or eccentric”.

Ron H: Why do you suppose there aren’t major problems of limited access in the relatively freer market for food – something that is even more critical than medical care?

There are problems with people not having enough food.

Ron H: High deductible catastrophic health insurance should have a minimal effect on most medical care decisions and prices.

It’s the high-cost chronic diseases exceeding the deductibles that cause the most stress on the medical system.

Z: “It’s the high-cost chronic diseases exceeding the deductibles that cause the most stress on the medical system.”

Reference please.

“There are problems with people not having enough food. ”

Then why don’t we have universal government food coverage? Why can’t people and their employers purchase comprehensive food coverage plans as they can for medical treatment? Instant shortages could be created in that way, and food prices could soar. Why must people shop for their food based on their own needs and preferences, based in part on prices, and pay for it with their own money?

“Leaving aside your loaded terminology, most people believe in democratic governance, so it is your position that would be “odd or eccentric”. ”

No, it’s bizarre that you seem to prefer that money be stolen from strangers to pay for medical treatment for your loved ones.

“It’s simply a fact that people will be left out. That’s the price of a free market.”

No system is perfect, but we think you will find that a market will produce better and cheaper results for more people than the one you advocate, where incentives and market signals are either perverse or nonexistent.

If you don’t agree, please explain why non-insured procedures such as lasik and cosmetic surgeries continue to improve and their prices decrease, while medical treatment paid for by 3rd parties increase in cost?

Ron H: No, it’s bizarre that you seem to prefer that money be stolen from strangers to pay for medical treatment for your loved ones.

Well, you can keep using loaded terms, but most people understand the need for taxes. It is your position that is “odd or eccentric”.

More important, to act surprised, which you often do even though the vast majority of people disagree with you, would seem to imply that you have a lack of understanding of people.

Zachriel: It’s simply a fact that people will be left out. That’s the price of a free market.

Ron H: No system is perfect, but we think you will find that a market will produce better and cheaper results for more people than the one you advocate, where incentives and market signals are either perverse or nonexistent.

Perhaps, but most people won’t allow a completely free market in health care.

Nor are markets omniscient. Indeed, bloodletting was marketable medical skill for a long time with little improvement simply because the market couldn’t reach a valid judgment on efficacy. That required something else.

Z: “More important, to act surprised, which you often do even though the vast majority of people disagree with you, would seem to imply that you have a lack of understanding of people. ”

Oops! Is that a logical fallacy there? Do you really have any idea how many people disagree with us, or are you merely projecting based on your own narrow view?

We are continually surprised. We never get used to the idea that otherwise apparently intelligent and logical people can actually believe that it’s OK to force peaceful people to do things against their will and to steal their property from them.

“Well, you can keep using loaded terms, but most people understand the need for taxes. It is your position that is “odd or eccentric”. ”

As applies to medical care that can only mean that there aren’t enough compassionate people in a rich country like the US to help those who need it, and that what few of them there are believe they must force some larger group of non-carers to pay also. Or maybe it’s as simple as some people wanting to use other peoples money instead of their own.

Z: “No. You had defended the statement “Markets always adjust to meet demand so that there are no shortages”. That is obviously incorrect.

We assumed you understood that nothing happens instantaneously, and that there are constant changes in supply and demand that produce a changing price signal. Markets require a period of time for that adjustment that include temporary shortages or surpluses at the margin. That is not to be confused with a permanent and severer shortages like that for kidneys and dialysis.

Z: “Of course there are shortages in markets. Sometimes crops fail and there is not enough for everyone. Sometimes there’s not enough widgets and factories are forced to shut down, and people thrown out of work. That’s a shortage by any reasonable definition. ”

And markets will adjust to correct those shortages when allowed to do so. When widgets are again available the factory can be reopened and workers rehired.

That’s why it’s important to let the price signal work as widely and as quickly as possible without interference as was not done in New Jersey after Sandy.

Ron H: And those with with a sense of community, which includes most people, feel a personal responsibility to *voluntarily* help those old persons who aren’t random abstractions but actually known to them. We know that *voluntary* is a tough concept for you.

Not at all. Voluntary action is important. However, history has shown that it is not sufficient in some circumstance.

Ron H: By the way, only in your dreams can a collection of 7 billion, or even 310 million people be called a ‘community’.

If you mean that the sense of community is just that, a sense, then sure. Nationalism is a powerful force in modern history. Many, if not most, Americans feel they are part of something bigger than themselves. You don’t have to share in that feeling to acknowledge that it exists in others.

“Not at all. Voluntary action is important. However, history has shown that it is not sufficient in some circumstance. ”

Sufficient for what? We wonder if a system that forces everyone to contribute works better. Who gets to decide these things?

Z: “If you mean that the sense of community is just that, a sense, then sure. Nationalism is a powerful force in modern history. Many, if not most, Americans feel they are part of something bigger than themselves. You don’t have to share in that feeling to acknowledge that it exists in others.”

Nationalism and is an extremely dangerous force in modern history. It frequently leads to things like this and this.

Don’t confuse nationalism with the feelings of compassion and caring people feel for their family, friends, and neighbors, as well as others they may encounter who are in need.

Nope. We’re not arguing democracy is the “worst except all the others” because most people agree, but simply noting that you seem to be totally unaware of this basic view of modern humans.

Ron H: Do you really have any idea how many people disagree with us, or are you merely projecting based on your own narrow view?

Not everyone supports democracy, just most everyone in the developed world, as well as majorities in most of the rest of the world. For instance, support for democracy in Egypt 63%, Tunisia 84%, Turkey 71%, but only 41% in Pakistan (Pew 2012). Many of the rest don’t support anarchy, but various forms of authoritarian governments.

Ron H: We are continually surprised. We never get used to the idea that otherwise apparently intelligent and logical people can actually believe that it’s OK to force peaceful people to do things against their will and to steal their property from them.

Sort of like someone who is very forgetful, you get to meet new people every day!

Ron H: You have no idea what “most people” believe.

Actually, statistical sampling can give us some idea the opinions of “most people”.

Ron H: When allowed to do so.

Not all cases. For instance, clean air is subject to the tragedy of the commons. Also, modern industrial economies are subject to booms and busts, which can lead to long periods of underutilization of resources. And, of course, some events are simply out of the control of humans.

But you had said, “only in your dreams can a collection of 7 billion, or even 310 million people be called a ‘community’.” In fact, people often do feel a kinship with their countrymen, and speak of themselves as part of the nation or people, often very fondly.

– FLUELLEN: Your majesty says very true: if your majesties is remembered of it, the Welshmen did good service in a garden where leeks did grow, wearing leeks in their Monmouth caps; which, your majesty know, to this hour is an honourable badge of the service; and I do believe your majesty takes no scorn to wear the leek upon Saint Tavy’s day.

KING HENRY V: I wear it for a memorable honour; For I am Welsh, you know, good countryman.

FLUELLEN: All the water in Wye cannot wash your majesty’s Welsh plood out of your pody, I can tell you that: God pless it and preserve it, as long as it pleases his grace, and his majesty too!

KING HENRY V: Thanks, good my countryman.

FLUELLEN: By Jeshu, I am your majesty’s countryman, I care not who know it; I will confess it to all the ‘orld: I need not to be ashamed of your majesty, praised be God, so long as your majesty is an honest man.

Z: “In modern democracies, the people acting through all the various institutions that constitute modern society. ”

Yeah, Yeah, same old same old, but does this system of forcing *contributions* from people work better than markets and natural human compassion for others to “minimize suffering in “random old people”, for instance”? That was the main question.

“Sure it can be. It can also give people to courage to resist real tyranny.”

LOL! Among the many other things not remembered, we had forgotten that people usually resist tyranny by singing.

Of course it’s necessary to use fiction to make that point, as the French didn’t really resist tyranny. They were defeated and surrendered in little more than a month.

And of course the tyrant that defeated them was able to inflame such a strong nationalist spirit among his people that they were actually able to kill millions of fellow citizens who were “not like us”.

No thanks; we prefer a sense of community.

And of course we always feel a closer bond with our comrades when we wear leeks in our caps.

Are those the best examples you can think of?

“But you had said, “only in your dreams can a collection of 7 billion, or even 310 million people be called a ‘community’.” In fact, people often do feel a kinship with their countrymen, and speak of themselves as part of the nation or people, often very fondly. ”

Often in a hostile Us vs Them context like “Buy American”, or “Those effing Chinese are taking over all of “our” industry.”

Tribalism is a natural part of our human heritage that has helped us survive as a species. It is easily manipulated by those in power, aided unwittingly by those who believe : “In modern democracies, power is distributed through all the various institutions that constitute modern society.

Do you never wonder why there is always an enemy to defeat? Besides actual military hostilities the US has been engaged in a “cold war” with the Soviet Union, a “war on drugs”, a “war on poverty”, a “war on terrorism”, a “war on crime”, and of course economic competitions with other industrialized nations, when in fact trade is cooperation that is mutually beneficial.

Ron H: Yeah, Yeah, same old same old, but does this system of forcing *contributions* from people work better than markets and natural human compassion for others to “minimize suffering in “random old people”, for instance”? That was the main question.

Yes, if only for the reason that systems capable of robust central organization typically overpower; militarily, economically, culturally; systems without such organization. This process is often painful, even when the dominant culture isn’t trying to conquer.

Ron H: Among the many other things not remembered, we had forgotten that people usually resist tyranny by singing.

“People identify and organize by a variety of cultural clues. People give their lives for flags, for instance. The_Red_Badge_of_Courage”

Of course. People do many destructive and stupid things, but dying for a flag is not a rational action while fleeing the field of battle is. If everyone fled the field of battle, or didn’t even show up, there would be no wars. “What if they gave a war and nobody came?”

“In any case, your previous assertion that there are no communities of millions is clearly rebutted. You always seem surprised by common aspects of the human condition.”

Far from it. A community can only include actual people who have some type of interaction with or knowledge of one another. Anything that includes millions of abstractions is just that – an abstraction.

If a community of millions were possible there would be no need to force those who don’t consider themselves part of the community to join against their will.

“Most things people do are not rational. There is no action without passion. Perhaps you should visit Earth some time. The inhabitants think with their meat. ”

And of course it’s pointless to consider improving on that condition as no improvement is possible. We suppose that’s why no human has ever considered anything beyond their next meal.

Action is a response to unease. From hungry to not hungry. From cold to warm. From less to more. From want to satisfaction of want.

We believe people have compassion and will care for others in need. You believe they must be forced to do so by others who somehow knows what’s best.

We believe the individual is sovereign. You believe there must be an elite group in charge and that two wolves and a sheep voting on what to have for dinner can produce good outcomes as long as it involves ” the people acting through all the various institutions that constitute modern society” – whatever that means.

We believe people have natural, inalienable rights as a condition of their humanity. You believe people have those rights others allow them to have.

We believe that among those natural rights is the right to pursue one’s own ends by their choice of means that don’t infringe on the rights of others. You believe people must be forced to act or not act according to rules created by others who have decided they know what’s best for everyone.

We believe a person owns themselves, their own bodies, and the fruits of their labor. You believe either that the fruits of a person’s labor actually belong to the group, or that it is acceptable for the group to steal it, by claiming it is in the group’s best interest.